Europe’s Lufthansa Group expects to return to almost all of its pre-COVID destinations by September after reporting a reduced loss and positive cash flow in its second quarter.
The aviation group said it benefitted from a significant market recovery “with increasing passenger and booking numbers” in its second quarter.
An operating loss of 952 million euros ($US1.125 bn) was a 43 percent improvement on the same quarter in 2020, boosted by strong results from Lufthansa Cargo and Lufthansa Technik.
This combined with significant cost reductions and strong bookings across group airlines to deliver an adjusted free cash flow of 340 million euros, staunching the outflow and hitting positive territory for the first time since the COVID crisis began.
Group sales of 3.2 billion euros were 70 percent higher than the second quarter a year ago.
“Relaxation of travel restrictions in international air traffic and a great pent-up demand among passengers drove both demand and activity,’’ the company said.
“In June alone, the number of bookings was more than twice as high as at the beginning of the quarter.
“As planned, the capacity offered at the end of June was 40 percent of the pre-crisis level.”
The airline said it was currently servicing 84 percent of destinations served before the crisis, adding: “By September, nearly all destinations will be offered again.”
Lufthansa is seeing a high demand for tourist destinations and says it expects a gradual recovery in business travel in the second half of the year.
However, it cautioned that the group’s development for the full year remained dependent on the pandemic and travel restrictions.
“The desire for travel is unbroken among people,’’ it said in its outlook.
“Lufthansa therefore expects a positive development in demand for European tourism and an increasing recovery in business travel in the second half of the year.
“The group’s airlines have further expanded their range of long-haul flights to include tourist destinations.
“The company expects an increasing opening of the markets in the second half of the year.
“Air travel to North America should be possible again from late summer and gradually towards Asia towards the end of the year.”
The company predicted capacity, measured in seat kilometres, would be around 40 percent of pre-crisis levels in 2021 with an increase to 50 percent of pre-crisis levels in the third quarter.
“The group thus expects to be able to stop the operating cash outflow in the third quarter and to generate positive EBITDA,’’ it said.